April - McDonalds Differentiates Product

McDonalds has been one of the most successful companies in Japan when it comes to riding the economic cycle - their aggressive cost cutting during the beginning of the economic difficulties was successful to raise sales. However, now there seems to be a different strategy.

McDonald's Japan has opened new shops with increased comfort and higher price settings in a bid to lessen the burden of higher operating costs.

The major fast food chain operator has renovated 13 of its McDonald's shops in central Tokyo, including those in Shibuya and Minato wards, into more spacious and relaxing restaurants with elegant designs.

Designed by a French decorator, the renovated shops feature sophisticated black and brown tones, instead of the chain's trademark red and yellow colors, and a more luxurious atmosphere created using light-emitting diode (LED) lights and new staff uniforms. The company has also installed sofas at the restaurants for more customer comfort.

Meanwhile, the company has set product prices at these shops at 10 to 50 yen more expensive than those for conventional McDonald's outlets.

Despite offering its products at low uniform prices nationwide, McDonald's has been forced to pay high rent for the stores in central urban areas.

"There has been a lack of balance (between costs and prices)," a company official said, explaining that the hamburger chain has decided to embark on the new business model to see "how far customers will accept price hikes based on improved services."

The company will decide whether to increase the number of such outlets after studying their ability to attract customers.

In Europe, there are already over 790 McDonald hamburger shops with similar upscale concepts.

http://mdn.mainichi.jp/mdnnews/business/news/20100427p2a00m0na017000c.html